In one of the previous posts, we discussed in detail a Borello test employed by California courts and administrative agencies in determining whether a worker is an independent contractor or an employee for purposes of wage and hour disputes.
We also pointed out that different jurisdictions (state vs. federal) and administrative agencies apply different tests for determining independent contractor status. For example, the IRS uses a list of 20 common law factors, but California Employment Development Department (EDD) uses a California Common law factors which is a variation of the Restatement of common law. Some California and federal courts utilize an economic realities test, also known as the “remedial purposes” test.
While all these tests are somewhat distinct and can lead to inconsistent results, there is a substantial overlap. Specifically, if you were classified as an independent contractor, your counterpart has no right to control or tell you how and when you should perform the services for which you were contracted. To help you better understand the California independent contractor law, we have listed 20 examples of practices that you should not be subjected to as an independent contractor. If some of these examples apply to you, it is likely that you are not an independent contractor but rather an employee, and as such you are entitled to a number of employment benefits and protections. A person who hires you as independent contractor is not supposed to:
- instruct you on how to perform the job, especially in a form of written instructions,
- provide you with training,
- designate supervisors or managers to monitor your work,
- require you to attend regular meetings,
- use forms that refer to you as employees (all circulating documents must refer to you as independent contractors),
- require you to work on the company’s premises,
- require you to wear a uniform,
- prohibit you from hiring assistants or support staff,
- prohibit you from subcontracting all or portion of services,
- require you to follow a specific time schedule,
- require you to submit periodic reports,
- reimburse you for business expenses,
- prohibit you to work for other companies,
- terminate independent contractor relationship for reasons outside of the scope of the independent contractor agreement,
- include in an independent contractor agreement a clause that allows the company to terminate you at-will,
- provide your with employment benefits, including paid sick leave, vacations, health insurance, etc.,
- provide you with business cards with the company’s logos,
- give you a title within the company,
- pay for your licensing fees,
- provide you with tools or equipment.
Keep in mind that just because one of these factors applies to you, it does not mean that you are an employee. No single factor is determinative and the courts usually look at the totality of circumstances. For example, a company may require an independent contractor to work on its premises or use company’s equipment as long as the reason for that is other than controlling independent contractor’s services (e.g. security purposes). Analogously, an independent contractor may be required to obtain company’s authorization before he can subcontract his services. If you have questions about this article or would like us to help you to determine your employment status, feel free to contact me, a San Francisco employment law attorney.
